CNET también está disponible en español.

Ir a español

Don't show this again

Culture

Free ISP NetZero worth $3 billion after IPO

The company, which gives people free Internet access in exchange for their agreeing to see online advertising, rises 82 percent in its first day of trading.

    WESTLAKE VILLAGE, California--NetZero, which gives people free Internet access in exchange for their agreeing to see online advertising, rose 82 percent in its first day of trading.

    The company, based in this Los Angeles suburb, rose 13.13 to 29.13. About 19.5 million shares were exchanged, making it the seventh most active issue on U.S. markets. The company has a market value of $3 billion.

    NetZero's free service is seen by some as a challenge to the revenue model of giants such as America Online, whose subscribers pay a $21.95 monthly charge. But AOL has more than 18 million subscribers paying the fee, while NetZero said that in August, about 891,000 of 1.68 million registered users had accessed its service.

    Those who use NetZero's service see ads on a small window on their screens that cannot be closed or reduced.

    The company has marketing relationships with Compaq Computer and Xerox under which the computer and equipment manufacturers have agreed to bundle NetZero software with some of their products.

    NetZero sold 10 million shares at $16 each yesterday, raising $160 million.

    The shares were priced at the top of the $14 to $16 range set by Goldman Sachs, which handled the transaction. Goldman had raised the range from $9 to $11, reflected in a filing yesterday with the U.S. Securities and Exchange Commission. The sale represented a 10 percent stake.

    Copyright 1999, Bloomberg L.P. All Rights Reserved.